DOD Cancels $10 Billion JEDI Contract, Takes New Direction on Cloud Procurement

On July 6, 2021, the Department of Defense (DOD) canceled its $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud procurement, close to two years after issuing the award to Microsoft and merely two months after the U.S. Court of Federal Claims issued a sealed decision denying the Department of Justice’s and Microsoft’s motions to dismiss Amazon Web Services’ (Amazon) bid protest challenging the award. This end to the JEDI saga will likely shape the decisions of other agencies as they approach future cloud procurements, impacting cloud vendors for years to come.

In a same-day press release, DOD explained that it had “determined that, due to evolving requirements, increased cloud conversancy, and industry advances, the JEDI Cloud contract no longer me[t] its needs.” DOD further explained that JEDI was created at a juncture when DOD’s needs were different and “cloud conversancy was less mature.” DOD now believes that with the “evolution of the cloud ecosystem” and “changes in user requirements,” a fresh procurement is warranted.

Thus, concurrent with the cancelation of JEDI, DOD has declared that it will seek new cloud efforts through a multi-cloud / multi-vendor indefinite delivery, indefinite quantity contract titled “The Joint Warfighter Cloud Capability” (JWCC) procurement. Preliminarily, for JWCC, DOD is seeking proposals from Microsoft and Amazon, both past frontrunners for award of the JEDI procurement. Although the JWCC procurement appears restricted to only these two offerors, DOD, in a pre-solicitation notice, explained that it is aware of five U.S.-based hyperscale cloud service providers (CSPs) that may be able to compete for award and that DOD will solicit and negotiate to award a contract to all responsible vendors, if deemed capable of meeting JWCC’s requirements. While DOD acknowledges that Amazon and Microsoft appear to be the only parties capable of meeting JWCC’s requirements at this time, the pre-solicitation notice indicates that DOD is keeping its options open to other vendors who can meet all of DOD’s requirements, plausibly in an attempt to give CSPs like Oracle, IBM, and Google the opportunity to compete and keep pre-award protests at bay.

PilieroMazza is monitoring the JWCC procurement closely and will provide updates as information becomes available. Lauren Brier recently provided additional comments on the JWCC procurement for the Law360 article “DOD’s Preference For Microsoft, Amazon May Haunt New JEDI.” Her comments can be read here.

For more details on DOD’s cancellation of the JEDI contract and the JWCC procurement, please contact Lauren Brier, the author of this blog, or a member of PilieroMazza’s Government Contracts Group.

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